How large of shift in AA is appropriate to do within a single year? I picked some mutual funds straight out of college, and had not adjusted much in the intervening 15 years. Thanks to spare time at home due to Covid-19, I finally have had time to learn more about investing and AA. My spouse and I currently have an AA of 91/9 and given our age and risk profile an AA of about 80/20 seems more reasonable. Even though we have a very high savings rate, it would take more than 2 years of investing exclusively in bonds and international stocks to move from our current AA to our desired AA. Such a large change in investment strategies seems antithetical to a slow, steady, buy and hold strategy. Perhaps it would be better to aim for shifting our AA by 2% per year? I want to keep buying at least some US stocks in case this turns out to be bottom of the market.

There is no “single year limit.” The right amount is whatever it takes to get to your AA. If you’ve determined it’s 80/20, do it all at once. You may fall prey to market timing and behavioral mistakes otherwise. Ask me how I know.

I’d probably shift to 85/15. Let it ride for a few weeks to confirm my sentiment. Then finish it off and move the rest of the way to 80/20.

If you prefer, can also just switch to 80/20 immediately. As long as you are confident that 80/20 is more appropriate for the level of risk/return you desire, I don’t see any problem with an immediate 10% change.

Seeing as you have had the allocation for a considerable time period keep one eye on tax consequences..... if it matters little to not at all get it done with.... it the tax bite is a concern moderate to fit your needs.

Such a large change in investment strategies seems antithetical to a slow, steady, buy and hold strategy. Perhaps it would be better to aim for shifting our AA by 2% per year?

The difference between 90/10 and 80/20 is not going to be statistically significant. It's a trivial shift, and not one you're like to notice in the performance of your portfolio.

That said, I generally object to sudden changes in asset allocation on purely behavioral grounds (i.e. a desire to make a sudden shift is, in itself, more often than not a dangerous impulse).

Why not just invest new contributions at a 50/50 stock/bond allocation until your allocation is down to your target? This would strike a balance in terms of regret management: you won't be able to regret a sudden move that was sub-optimal and also won't end up regret doing nothing at all.

"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

Why not just invest new contributions at a 50/50 stock/bond allocation until your allocation is down to your target? This would strike a balance in terms of regret management: you won't be able to regret a sudden move that was sub-optimal and also won't end up regret doing nothing at all.

+1
I think slow, even sloth like, movements are appropriate for people in your position. You're still a ways from retirement. In my experience one hasty move can bring on another.